Reliance Jio 4G- Changing the Indian Telecom Sector

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5 people are having a discussion on the topic (Arpan, Bhavin, Charuta, Devika, Emraan)

Category: Business

Group Discussion Starts

Arpan: Hi everybody. We are here to discuss the gd topic on Reliance Jio and its impact on the telecom sector especially on its competitors like Vodafone, Airtel, Idea, Aircel etc. Reliance Jio has completely disrupted the existing market with its services and with the massive launch it made. It has made tremendous inroads in the Indian telecom market and is here to stay.

Bhavin: Hi. I agree. Reliance Jio has made an incredible entry into the mobile telecom sector in India. Considering that the brand is a subsidiary of Reliance Industries, its owner Mr. Mukesh Ambani has left no stone unturned in ensuring that the brand has a massive launch. And the impact of the launch of Reliance Jio is for everyone to see. Jio has also had innovation in introducing 4G VoLTE

Charuta: I think that the entry made by Jio is undoubtedly a big one. But does this mean that it can overpower its existing competitors? I don’t think so. I personally feel that players like Idea, Vodafone, Airtel etc have been in the Indian telecom market since a long time and have a loyal set of customers. People are quite happy with their existing telecom service providers, which can be understood that despite MNP, there have been limited transfers from one player to another.

Image: Wikimedia

Emraan: I also think the same. People are currently taking Reliance Jio sims because of the various free 4G services, free sim cards etc being distributed by Reliance. It is only a matter of time when Jio starts charging its customers, and people will leave their free sims.

Devika: Well, according to me, the launch of Reliance Jio is not only about the telecom sector and its competition. But another perspective that can be looked into is that it has ensured that all telecom operators are on its toes. For many years, telecom industry has been giving the same services and have stabilized their prices. The sudden launch of Jio service has ensured more competition in the segment. Ultimately this would only benefit the Indian consumer. It would help increase penetration of telecom to the remotest areas and would help for a digital India.

Bhavin: Well said Devika. Jio has suddenly revived the stagnant telecom sector. Due to the sudden decrease in prices, the consumers have benefited maximum.

Emraan: That all is fine. But at what cost? For the other telecom players it is unfair. TRAI should not have allowed Reliance Jio to offer all services for free. This has completely disturbed the market as the prices have plummeted severely, causing losses to players like Airtel, Vodafone, Idea etc. This unfair competition can have serious issues in the telecom sector.

Arpan: I beg to differ. Ultimately, this is business. Jio is simply doing business. If it can sustain giving free data, free calls, free sims etc, no one can question their business model. At this moment, they simply want to attract new customers, which they are able to do. Once they do acquire customers, then only their service, customer focus etc would decide which is the best telecom operator in India.

Charuta: From where I see, people only want to use the free 4G services as long as they are available. People only want good service which is cost effective. Since most of the services would be given at the same price eventually, people would really not be bothered about which brand they use.

Devika: Yes. And this is definitely the best opportunity for India as a country. The more the competition, the better it would be for the end consumers. Reliance Jio along with Idea, Airtel, Vodafone etc would ensure that mobile penetration would increase across the country. This would then make sure that the overall internet literacy increases and digital India would also become a reality. More than the short term issues, the price wars would eventually help the telecom market grow in India

Bhavin: Cost effective services, more competition etc would ultimately benefit the customer. Hence the launch of Jio can be a great situation for the telecom market in the long run.

Conclusion

Launched in 2016, Reliance Jio started offering free services for customer acquisition. This has definitely been a move to capture maximum market in India and increase competition. However, telecom players like Idea, Vodafone, Airtel etc feel that this has given them an unfair advantage and has disrupted the market completely. Prices have declined tremendously, which can spoil the profits and the market. However, another school of thought promotes that increase in competition would help improve services, benefit the customers and eventually help increase telecom penetration in India.

Facts related to the Discussion

• Reliance Jio was launched in September 2016 by Mukesh Ambani

• Shahrukh Khan is the brand ambassador of Jio.

• Jio has close to 100 million subscribers across India, and till 31st March it would offer free services

• Telecom players like Idea, Vodafone, Airtel have called this an unfair advantage as Jio is offering free services

• There has been a tremendous revision of prices across the telecom sector, which is bound to reduce profits for telecom players

• Reliance Jio first to launch 4G VoLTE and are also introducing new phones also

• Jio has several apps for TV, chat, messenger, music etc

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